Great Short Sale Deals in Clark County – But What is a Short Sale Exactly

There are some great deals to be had right now in homes offered as a short sale, but there is a lot of misunderstanding about short sales and what they entail.

So what is a short sale?

Well to start – the name definitely does not describe the process.

In a short sale, a buyer pays less than the amount a seller owes the lender. There are more cases of ‘short selling’ in markets like the one we have been experiencing for the past few years where home values are dropping.

Typically, when a homeowner can’t pay his mortgage because he has suffered some sort of hardship — loss of a job or divorce for example — he simply sells his home.  But when home values are dropping, this can be a problem. In some cases, a homeowner might find he owes more on his mortgage than his home will sell for.  In these cases, lenders will sometimes accept less than the amount owed on the home, assuming the homeowner doesn’t have other assets that can be sold to make up the difference. The lender then doesn’t have to go to the expense of selling the house at auction.

The question you have to ask yourself is: Are you really getting a great deal?

Short sales have significantly greater uncertainty and hassle than traditional sales. In some cases, you can get the necessary lender approvals rapidly and in other cases you may wait months. There is also the issue of condition. Owners loosing their homes cannot fix them up to sell them so these homes often look worse off than non-short sale properties. In some cases, properties offered as short sale may have significant issues.

Like any home listed for sale, there is the potential that the asked for price is above what you could buy other similar properties for. Your realtor can help you know what similar houses in the market are selling for and this information will help you determine if you are getting a good deal.

Find out how long the home has been on the market and make sure you get good inspections.  A seller who is in financial trouble often can’t keep up with repairs.  You’ll want to have a good idea what has been neglected. Short sales are tricky legal propositions and consulting with an attorney experienced in this sort of sale is advisable.

You will also want to know who the lender or lenders are and remember the lender will be looking for the best deal it can get so they probably will not instantly agree.

One other caution: Some seller agents are now asking that the buyer pay a “negotiating fee” for the “privilege” of purchasing their home. This will probably not be easily apparent from information you will find on the internet about a home but is easily seen by your agent. In some cases, these hidden buyer-side closing costs are as much as $6,000.

So in conclusion – if you read all the fine print – are willing to put in a little sweat equity here and there – have time and patience  – you can get a great deal with a short sale property